Understanding the foreclosure process in IN is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in IN
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan, generally after the borrower stops making payments. The banking system doesn’t normally care why the payments aren’t being made most times which is unlucky.
Foreclosure is not very pleasant. If you don’t want to go through foreclosure, there are a few other methods, though. Many times we can help and avoid foreclosure altogether.
When you know how foreclosure in IN works, it hands you the knowledge to make sure you navigate it well and come out the other end as well as possible. There are many ways that it can go and knowing your options will help you get out of this quickly.
The Basic Stages of A Foreclosure
There are a few essential things that are crucial to the foreclosure.
Foreclosure is different everywhere, which is why we want to help you.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (260) 220-8715 or through our contact page to have us walk you through the specific foreclosure process here locally in Fort Wayne.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually, a lender will send out many notices that you are in arrears – overdue or behind in your payment. They also come and inspect the home to see the condition of it from time to time when payments aren’t made. In Indiana, once the notice of Sheriff sale has been issued, there is little that can be done.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property. The home is sold at Sheriff sale at that time.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property. Sometimes the property is purchased by an investor, but many times it is bought by the bank that foreclosed to protect their investment.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
- Indiana is a Judicial state and thus this won’t apply to most people reading this.
Anyone who has an interest in the property must be notified during either type of foreclosure. Notice is normally accomplished by certified mail and/or the sherriff delivering the notice directly.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Sky Line Properties LLC to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Fort Wayne, we can help you.
We buy houses in Fort Wayne IN like your’s from people who need to sell fast.
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Another Foreclosure Resource For Fort Wayne IN HomeOwners: